2025 (2) TMI 491 - AT - Income Tax

Addition on account of unaccounted brokerage income - AO observed that assessee being a broker must have received commission @ 1% - HELD THAT - Apart from referring the word seized material no other corroborative evidence or statement has been brought on record either by AO or CIT(A) to rebut the explanation offered by assessee by way of any enquiry. Rejection of the explanation of the assessee by the lower authorities without bringing any material on record to controvert the claim of the appellant is not justified and therefore the additions made by the AO and confirmed by CIT(A) based on presumption surmises and conjectures would be liable to be deleted. Decision of the CIT(A) in confirming the addition made by the AO on account of unaccounted brokerage income from E-Homes Infrastructure Private Limited rejecting the detailed submissions and explanations duly supported with the evidences brought on record including the confirmation of the brokerage payments can not be approved - addition confirmed by the Ld. CIT(A) is deleted. Decided in favour of assessee.

Summary

The issues presented and considered in the judgment are as follows:1. Whether the assessment orders passed by the Commissioner of Income Tax (Appeals) are valid under the Income Tax Act, 1961.2. Whether the additions made by the Assessing Officer (AO) under Section 153A of the Act are justified in the absence of incriminating material.3. Whether the proceedings initiated under section 153A against the assessee are in compliance with statutory conditions and procedures.4. Whether the additions made by the AO and confirmed by the CIT(A) based on surmises and conjectures should be deleted.5. Whether the CIT(A) erred in confirming the addition of unaccounted brokerage income from E-Homes Infrastructure Private Limited.The detailed analysis of the issues is as follows:Issue 1:The Tribunal consolidated and heard the appeals together. The appellant challenged the validity of the assessment orders passed by the CIT(A) under Section 143(3) r.w.s. 153A of the Income Tax Act, 1961, citing non-compliance with CBDT Circular No. 19/2019 requiring mandatory DIN in the assessment order. However, the Tribunal dismissed grounds 1 to 6 as not pressed by the appellant.Issue 2:Regarding the additions made by the AO under Section 153A without incriminating material, the Tribunal found that the assessee provided explanations and evidence that were not rebutted by the authorities. The Tribunal held that the additions based on presumption and conjecture should be deleted.Issue 3:The Tribunal examined the compliance of proceedings under section 153A with statutory conditions and procedures. It found that the CIT(A) confirmed additions without substantiated evidence, leading to the conclusion that the order was perverse to the facts on record.Issue 4:The Tribunal addressed the CIT(A)'s confirmation of unaccounted brokerage income additions from E-Homes Infrastructure Private Limited. The Tribunal noted that the CIT(A) based the confirmation on surmises and conjectures without proper examination of the evidence provided by the assessee. The Tribunal held that the addition should be deleted as it was not supported by facts.Significant Holdings:The Tribunal held that the orders of the CIT(A) were perverse to the facts on record in confirming additions without proper substantiation. The Tribunal deleted the additions of Rs. 11,04,580/- and Rs. 63,75,010/- for Assessment Years 2020-21 and 2021-22, respectively.In conclusion, the Tribunal partially allowed the appeals of the assessee, emphasizing the importance of substantiated evidence and proper examination of facts in tax assessments.